WELLINGTON NEWS

Hokitika Guardian, 18 May 1927, Page 4

WELLINGTON NEWS

-MONEY, MORTGAGES AND INTEREST. J (Special to “ Guardian.”) } WELLINGTON, May 18. Mr 11. E. Holland has been making a comprehensive tour of the North Island, but his speeches have not attracted attention, and he has received scanty notice in the papers. It was perhaps all that ho deserved, for Mr Holland’s policy may be summed up as 11 Nationalise everything.” His policy will not go down with the people of New Zealand. In his speech at Palmerston North the other day he claimed that mortgages had increased in amount by 188 per cent., while the capital value of the land had increased by 77 per cent. There does not seem to be much to grumble at over this. Obviously the demands of borrowers have been met very freely. Rut what those who wish to borrow on broad acres desire is to get money at a very low rate of interest. Those who have raised loans from the Advances Office, and this office already has lent Cte,ooo.ooo, have got their loans at a relatively cheap rate of interest, with extended terms of repayment. In a young country like New Zealand where there is so much development work to be done, capital is the first essential, j and it cannot he said that capital has not been provided for the purpose. According to Mr Holland there has been a very substantial increase in the mortgages. And every effort is being made to provide further funds to Help the farmers. Mr Holland further alleged that neither the State Advances nor the Rank of New Zealand made use of’ the powers given them Inst session to provide the farmers with cheap money. The statement lacjks accuracy. The Rural Credits Act became operative on April 1. and loans are being made under the powers of that Act. and the Minister for Finance stated that as soon as a sufficient number of mortgages bad been granted there would he an issue of bonds secured on tbe mortgages. The Bank of New Zealand long term loan branch lias been in operation for a little while. The Rank bad first to obtain tbe requisite capital from the shareholders, and this could not be done in a day. The branch is in operation now. and it can be claimed that the Rank has not lost any time in taking advantage of the powers conferred upon it by the legislation of last session. Then Mr Holland told his audience that the small farmers were carrying the greater part of the mortgage burden, 74 per cent of the mortgages being for amounts under L'sooo. Surely this is a voluntary burden. Tbe small farmers are not obliged to carry this burden. Surely Mr Holland will not suggest that the small farmers are being penalised. It is not likely that any of the mortgagors are paying any fancy rate of interest except for second, third and fourth mortgages. It is foolish political talk of this character that is doing this country a lot of harm.

The advance in the Hank rate lias caused many stupid protests Ho be made. Mr Holland states that, the increased rate will strike a blow at the Post Office Savings Rank, which Is nonsense. For the past five years the Post Office Savings Rank returns have shown that the withdrawals have exceeded tlie deposits, which indicates that the people have not been saving, or perhaps have keen ttnahie to practice thrift owing to the high cost oT living. Some of the members of local bodies are displaying a great deal of stupidity in respect to this movement in money rates, and one County Council passed it resolution viewing with alarm the increased rates, and ordering a copy of the resolution to he forwarded to the Minister cl' Finance. One wonders what the Minister of Finance can do in the matter. The banks are conducting their own business in their own way, ius't as other people and firms carry on their respective businesses. Tbe banks have raised their overdraft rates from 6 4 per cent to 7 per cent, but that does not mean that people must go to tbe banks for loans. It is quite optional. It a borrower goes to the bank now and succeeds in obtaining it loan ho must pay 7 pci cent; if he can raise the money elsewhere at a lower rate he is not likely to trouble the hank. A) hen butter is advanced a penny per lb the consumer is not pleased. He is not obliged to buy the butter at the increased price, he can abstain Irom eating blitter. The Minister of Finance cannot interfere with the hanks, and wlmt is morel he dare not do so. |